2000 years ago if you were to ask someone what the most precious substance is, an overwhelming majority of people would say gold. Even though gold remains highly valuable, even today, its importance globally has been overshadowed by a much more important commodity – oil. Until the end of the 18th century, a discovery of oil wouldn’t mean much. But it all changed at the dawn of the Industrial Revolution. The Industrial Age saw the development and ingenious creations, whether it be the first ever motor vehicle, the telephone or even the light bulb. Machines of this modern era were built to be quick and efficient. And for this, they needed vast amounts of energy, which they got from Oil. Oil and fossil fuel energy powered steam engines and modern factories and soon became the most sought after commodity. Without having oil, a country could not expect to produce any goods or products efficiently and for the masses, meaning that the nation would be stuck in a more agrarian, primary sector economy. Without industries that ran on fossil fuels, many jobs and employment opportunities that rose in urban metropolitan cities would never have risen. Because it is cheaper and more efficient than other energy sources, oil has boosted global production and reshaped networks by allowing for faster transportation. But oil also has important implications for global politics. Colonialism, decolonization, and economic liberalization have all shaped the history of oil, and oil has reshaped all of them!

The global oil boom really began with World War I. As Britain and Germany competed to build the best navies in the world, the British began converting their ships from coal to oil. Oil allows ships to stay at sea longer and travel faster and farther. But Britain had no domestic oil supply at the time. After the war, Foreign Secretary Lord Curzon said that Britain “won over an oil wave”. Most of that oil has come from the United States, the world’s largest oil producer and largest consumer of oil for most of the century.
The British did not rely solely on their American ally. In 1901, the King of Iran and a British contractor signed an agreement called the D’Arcy Concession. He gave the Anglo-Persian Oil Company the rights to Iranian oil for the next 60 years. In return, Shah received £40,000 and a 16% profit. In 1914, the British government bought a majority stake in the company. For the next 40 years, the British government controlled the extraction, production, distribution and most of Iran’s oil profits.

After World War II, seven oil companies known as the “Seven Sisters” dominated global oil production and distribution. In 1960, the Seven Sisters controlled 85% of the world’s oil. In 1960, Saudi Arabia, Iran, Iraq, Venezuela and Kuwait formed the Organization of the Petroleum Exporting Countries (OPEC). Their goal is to control the nation’s most important resource – guess what: oil. As countries decolonized throughout the 1960s, they sought to nationalize their resources, like Iran’s oil, often controlled by foreign governments or corporations. OPEC grew, and by the 1970s its members controlled half of the world’s oil. As global oil demand grew, OPEC negotiated better terms. Oil prices increased by 45% and the profits of OPEC countries increased by 2,000 to 3,000%. The key to OPEC’s success is their unity. OPEC includes countries of different religions and languages, as well as conflicting Cold War loyalties. And yet, in the 1970s, they successfully collaborated to fix the price of oil. This transfer of power from Western governments and corporations to oil producers in the Middle East is known as the Oil Revolution.

In retaliation for the United States’ support of Israel in the Yom Kippur War, the Arab members of OPEC announced an embargo (trade ban) against the United States and several other countries. In just three months, the price of oil has quadrupled.
The US was able to get oil from other countries, but the panic pushed prices up. Gas stations run out of fuel to sell as cars line up. Oil prices eventually fell, but they never returned to pre-1973 levels. In 1979, the second oil crisis broke out after the Iranian revolution, causing the price of oil to double. The OPEC embargo of 1973 was a short-term success for OPEC. In the long run, however, it shifted power from Middle Eastern oil producers to Western governments and corporations.

The 1970s strengthened and enriched oil-producing nations around the world. Even non-OPEC oil-producing countries, such as Mexico, benefited from their income increases. Countries in Latin America, Africa and the Middle East assumed this was the new normal and started borrowing money to invest in their industries, infrastructure and military. They borrow mainly from American banks. Other countries that are not oil producers, but dependent on oil imports, have also found that they need to borrow money from American banks to offset rising oil costs. The skyrocketing oil prices in the 1970s contributed to the global recession from 1980 to 1982. Industrial production slowed, affecting economic growth and causing unemployment to rise. During a recession, oil prices fall and the incomes of oil-producing countries fall. Many people find themselves heavily indebted, mostly to US banks.
This debt gave the US government leverage over these countries. Americans control the policy of the International Monetary Fund and the World Bank. The United States can grant new loans and cancel old ones, but aid comes at a cost. Debtor countries are expected to open their economies to American companies. Policies of free trade and privatization, particularly beneficial to American companies, have spread around the world. The architects of this system promised that it would help poor countries. Instead, it harms the economies of Latin America, Africa and Asia. Local businesses and markets declined as more power was transferred to Western corporations, which profited from these countries’ labor resources.

The following Gulf War, which was sparked due to Iraq’s anger at Kuwait overproducing oil and the aftermath that followed it, led to the reassertion of Western hegemony over global oil production. Today, in the 21st century, we may face a second oil revolution. Frightened by the oil price shocks of the 1970s, the United States, the world’s largest consumer and once the largest oil producer, focused on domestic oil production. New technologies such as hydraulic fracturing have once again made the US the world’s leading producer. But the future is uncertain. For example, in the spring of 2020, the COVID-19 pandemic caused oil prices to drop to historic lows as people stayed home and traveled less. A possible global recession after the pandemic (note that this article was written in May 2020). If we avoid this, we still face a global climate change crisis, which is caused by our increasing consumption of fossil fuels such as oil. International cooperation has put some pressure on us to change our fossil fuel consumption and the way we produce energy. The future of oil is uncertain, but its powerful impact on 20th-century history continues to blaze on.

Perhaps the single most catastrophic event in the last 90 years, apart from COVID-19 and WW2, was the 2008 Market Crash. We’ve all probably heard terms like ‘mortgage’, ‘subprime’ and ‘default’ when watching films and shows, such as the 2015 biographical drama, The Big Short, which chronicled how the markets fell, why they fell and the levels of greed and stupidity on Wall Street. To understand why greed and blindness reigned supreme during the worst period in the history of the global economy, it is imperative to understand why markets fall in general, and why the housing market’s collapse happened and the ripple effect it had globally. After all, we know that if the market crashes in the US, it would also crash in India, UK, China and everywhere else too. But why is it so? And most importantly, who is to blame for this crisis?

Let’s start with the first question: why does a market fall? Markets fall because something extraordinarily bad has happened, or is going to happen soon. This leads to groups of investors selling their stocks and builds a bandwagon that essentially leads to panic selling.

Another reason for markets to crash is due to a bubble. A bubble is an economic cycle characterized by a sharp increase in market value, particularly in asset prices. This rapid inflation is followed by a rapid decline in value, or contraction, which is occasionally referred to as a “crash” or “bubble burst.” A bubble typically develops as a result of an increase in asset prices that is fueled by irrational market behavior. Assets often trade at a price during a bubble, or within a price range, that is significantly higher than the asset’s intrinsic worth (the price is not in line with the asset’s fundamentals). A famous example of a bubble burst is the Dot-Com bubble during the late 90s and early 2000s, when investors speculated a great sudden rise in the tech industry, leading to massive investments in new tech companies. When these companies underperformed or even collapsed, most of this investor confidence was lost and people soon realized that they greatly overvalued tech stocks at the time.

Now, back to the topic – the 2008 Financial Crisis. But markets don’t fall so sharply overnight and the crisis was years in the making. During the early and mid 2000s, most banks internationally figured out that they could lend more and more to customers with low credit scores, even if it were against most regulatory government policy. Banks believed that most homeowners would not default and even if a few would, most borrowers would still be able to pay back loans on time. Many huge banks, who were believed to be “too big to fail” created CDOs (Collateralized Debt Obligations) that pooled together a bunch of loans together – often a lot of the bad ones – in order to make them seem like ‘risk free’ investments. Some banks were bailed out by the government, such as Bear Stearns, whereas others simply collapsed and couldn’t be saved, such as the Lehmann Brothers.

But, it was not all with bad intentions. Initially, to recover from the Dotcom Bubble, a series of accounting scandals and the 9/11 Attacks meant that the Feds lowered interest rates to a mere 1% in order to boost the economy. Most poor and middle class people were now able to take mortgages (home loans) at low interest rates and realize their dream of buying a home. But soon, when these borrowers defaulted (didn’t pay back) due to their financial inability to do so.

Who is to blame?
Numerous economists attribute the majority of the blame to loose mortgage lending regulations that allowed many individuals to borrow amounts far beyond their means. However, there are many people to hold accountable, including:

• unscrupulous lenders who promoted homeownership to people who would never be able to repay their mortgages.
• the investment gurus who purchased those subpar mortgages and packaged them for sale to investors. They appeared to be safe investments thanks to the top investment ratings that mortgage bundles received from rating organizations.
• investors who either neglected to look at the ratings or just took care to sell the bundles to other investors before they went bust.

Like very few others in history, the 2008 financial crisis got to a size that, when it burst, it hurt millions of people, many of whom weren’t investing in mortgage-backed securities, and devastated entire economies. Luckily, banks will never carry out such terrible mortgage lending practices and government regulations have become stricter in their approach to overseeing the banking industry.

Many major sports around the world comprise of teams of 11 players, whether football, cricket or even hockey. The following list of books are my Finance Starting XI books. Each book that you will see below contains something entirely different, yet so similar to the rest. Whether its a lesson in life, a story from a billionaire’s past or a mind boggling statistic, these books are sure to amuse and dazzle you. Get ready to increase your knowledge appetite!

11. I Will Teach You to Be Rich by Ramit Sethi

I Will Teach You To Get Rich has a style and form that breaks away from the norm of technicalities and complex sounding business terms. While personal finance books often seem very dry, this book is by no means boring. Ramit Sethi will treat you tales of “negotiating like an Indian” while tackling the finer details of your personal finances.

Throughout the book, you’ll come across manageable action steps at the end of most chapters. If you choose to act on these steps, your finances will be on track by the end of six weeks. Chapters look in depth about basic concepts like credit cards, index funds and investment principles and are certainly apt for the audience it was orginally written for – the average investors of 2009 America who were still feeling the consequences of the 2008 market crash.

10. Money: Master the Game by Tony Robbins

Money Master the Game by Tony Robbins is the ultimate guide to building a secure financial future. Robbins provides detailed accounts of what works and what doesn’t. It distills financial planning into 7 basic principles.

Distilling insights from the best minds in the financial world, Robbins explains the rules all investors need to know and shares the best strategies from those who have already mastered them. money game. Ultimately, its goal is to help readers establish a secure source of income for life. To that end, Robbins cuts through industry jargon, debunks common myths, and identifies investment pitfalls, such as hidden fees. It also explains how to minimize severe losses while increasing profits and how to stay on target in the long run. As a bonus, it includes a Q&A chapter with several prominent financial figures, including Yale chief investment officer David Swensen and Vanguard founder John C. Bogle.

9. Principles for Dealing with the Changing World Order by Ray Dalio

Ray Dalio is the founder and former CEO of Bridgewater Associates, the world’s largest hedge fund. His book The Changing World Order is a study documenting the rise and fall of empires, nations, and civilizations and how this has changed world order. As we approach the time when one great power declines and another rises, it is important to be prepared.

The first part of the book is to convince the reader that these cycles are happening and that they make the difference between going up and down at any moment. Dalio fills many pages of his book with explanations and insights into the full impact of money and credit on the rise and fall of empires. He explained that the monetary policies that the US used to stimulate the economy have now become problematic. Principles for dealing with a changing world order are not easy to read; it is a dense set of historical discussions that pervade one chart after another of evidence per cycle. Despite this obstacle, Dalio’s often unconventional, balanced analysis of the likely outcome of the current stiff competition between the United States and China is timely.

8. The Little Book of Valuation by Aswath Damodaran

If you want to be a successful investor, it is imperative to know how to value the value of a property. Valuation is at the heart of any investment decision, whether buy, sell or hold. In The Little Book of Valuation, expert Aswath Damodaran explains the techniques in language all investors can understand, so you can make better investment decisions when considering securities research reports and engages in independent efforts to evaluate and select stocks.

Page by page, Damodaran distills the fundamentals of valuation without masking or ignoring key concepts. The most interesting thing about a book like this is that it doesn’t confuse the average reader. You could be a bus driver, a school teacher or even a bored teenager reading this book, and you’ll still understand almost everything in it.

7. The Richest Man in Babylon by George S. Clason

George Clason’s The Richest Man in Babylon is known as the bible of financial freedom. This book shows the timeless rules and laws of money that anyone can use. This book is for those who want the goldmine of financial success. A few simple yet profound stories that will help you understand money.

Using short stories, this book teaches simple and clear lessons that lead to the secret to wealth creation that has remained unchanged throughout history. The story revolves around a man who wanted gold and worked hard to get it, learned from his mistakes and eventually became the richest man in Babylon. Every concept covered in this book is understandable to the average person, as it covers the basics of money management. With each chapter, money concepts tell you how to start building wealth, how to keep it, and how to multiply it. You will learn many new truths about life, which at first may be difficult for you to understand, but once you begin to understand the eternal principle of money, you will easily get rich.

6. The Psychology of Money by Morgan Housel

“The Psychology of Money” is a quick and engaging read that shows that the ability to achieve wealth often depends more on rational behavioral skills than intelligence – and that behavior is often difficult to teach. Author Morgan Housel illustrates his point through a series of short stories about people’s decisions to make money.

Throughout the book’s 20 easy-to-understand chapters, Housel offers examples of people who have succeeded — and those who have failed — in amassing wealth, preserving it, and making profitable long-term investments. Money psychology recognizes that the decisions people make about money are not always based on data. Instead of following the mathematical approach presented in traditional personal finance books, Housel seeks to explore how real money decisions are made. It shows how financial decisions are made based on factors such as personal history, worldview, fears, and pride.

5. A Little History of Economics by Niall Kishtainy

In A Little History of Economics, Niall Kishtainy details the complex trajectory of the economy from ancient Greece to the present day, drawing on a wealth of historical knowledge, unraveling anecdotes and examples as well as imaginative metaphors to trace the development of economic thought. What causes poverty? Is economic crisis inevitable under capitalism? Is state intervention in the economy good or bad? While the answers to these basic economic questions are important to everyone, unfamiliar economic language and math can seem daunting.

This clear, accessible and even humorous book is ideal for young readers who are new to economic concepts and for readers of all ages who want a better understanding of the history and ideas. economy. The development of economic thought has never been simple or linear. It is punctuated by new discoveries, shaped by developments in the economic landscape and subject to advances and failures. This largely chronological book begins with Plato in ancient Greece and the “religious economy” of the Middle Ages, galloping through the Enlightenment thought of Adam Smith, Karl Marx and the Great Depression. from the 1930s to the 2008 financial crisis.

4. Narratives and Numbers by Aswath Damodaran

Through a series of case studies, Narrative and Numbers describes how storytellers can better integrate and retell numbers and how number processors can compute more imaginative patterns. for careful consideration. Damodaran sees the early days of Uber and storytelling as key to understanding different ratings. It investigates why Twitter and Facebook are valued at billions of dollars in their public offerings and why one (Twitter) stagnated, while the other (Facebook) grew.

Damodaran also looks at older business models, such as those of Apple and Amazon, to demonstrate how a company’s story can enrich and constrain its story. And through Vale, a global mining company based in Brazil, he shows the influence of external narratives and how countries, commodities and currencies can shape corporate narratives. Narrative and Numbers reveal the advantages, challenges, and disadvantages of weaving stories around numbers and the best way to test a story’s plausibility. After all, stories without numbers are little more than fairy tails. Numbers without stories are exercises in financial modelling. A good valuation is a bridge which will bring stories and numbers together.

3. Freakonomics by Stephen J. Dubner and Steven Levitt

Freakonomics, which weighs just over 200 pages (plus a sizable piece of supplemental material for those who want to learn more), takes its main argument with the idea that economics exists as a tool for research. society. Steven D. Levitt, who calls himself a “rogue economist” in the title, uses the tool to analyze a wide range of random topics. These include the recent drop in crime in American cities, the potential for rampant corruption in professional sumo, and the real impact of parenthood on a child’s life outcomes, among others. different things. In fact, the tools and trends in Levitt and Dubner’s “economics” correspond so closely to data analysis experience that we are comfortable recommending this book as a love letter. to the field of data science (as well as other analytical professions). With this in mind, Freakonomics applies the following five principles:

• Incentives are the foundation of modern life.
• Conventional wisdom is often wrong.
• Dramatic effects often have remote, even subtle, causes.
• The “experts” – from criminologists to real estate agents – use their information advantage to serve their own agenda.

2. The Intelligent Investor by Benjamin Graham

Perhaps the greatest finance book of all time, ‘The Intelligent Investor’ serves as the foundation of modern investing and serves as a building block for navigating the financial world, right from your 20s. Benjamin Graham is widely revered as the Father of Value Investing and his philosophies have immensely influenced likes of Warren Buffet and others.

Graham uses the allegory of Mr. Market to represent the investing world at large. Some days, Mr. Market is overly optimistic and overvalues some stocks. Some days, he is depressed and undervalues them. The main task of the intelligent investor is to not follow Mr. Market’s moods. He should sell to Mr. Market when he is optimistic, and buy from him when he is depressed. This is just one of the many lessons on investing that Graham has dispensed in his book. For rookies and beginners, like myself, this book offers insight on how (and why) value investing works and presents the simplest method to approach stock investing. Perhaps the only reason why this book doesn’t take the number 1 spot is that it is made for people who are ready to invest. By ‘ready’ I don’t mean financially ready, but rather psychologically ready to adopt the lifestyle and strategies of the rich. For the average person with no strong financial knowledge, this book may sound like a shot at instant wealth, and following Graham’s advice may surely ‘make you rich’. But becoming rich is one thing, staying rich is another.

1. Rich Dad Poor Dad by Robert Kiyosaki

This was the book that got me interested in learning about finance and money making. If not for Rich Dad, Poor Dad, I perhaps wouldn’t have been here today. At first, this book is offending and I don’t mean in a bad way. The book is outright in challenging widely held beliefs about money and seeks to wake the readers up from the modern mindset that keeps them poor and build a mindset that recognises and understands the basics of money and what it truly means. One of the best things about this book is the way in which it is written. Whilst some of the other books in this list contain difficult to comprehend finance terms, Kiyosaki ensures that his book can be understood by anyone, even a 12 year old.

Kiyosaki’s lessons on money management and stories on why the rich get richer and the poor get poorer through the lens of his rich dad and poor dad’s beliefs and lifestyles serves as a basis of this book. A new story and analogy each chapter keeps the readers intrigued and ensures that the readers are prepared to be rich. Throughout the novel, he uses fancy cars, or driving expensive vehicles, as an expression of something wealthy people can or should do. He associates consumption with wealth, but never suggests that people spend money they don’t have. In fact, he insists on paying for his own luxuries not with income earned by employment but with passive income produced by investments.

For a more detailed review and summary of the book, check out my blog post on Rich Dad, Poor Dad.

Final Thoughts:

This list is by no means exhaustive. There are many great books on finance, business, economics and investing. There are books that teach you how to invest; there are books that teach you how to build a billion dollar business; there are books that impart stories and lessons on money management and then there are books that delve into the nitty-gritty of economics. Some good books focus more on stories, other good ones focus on numbers and data, but the greatest books on finance take the best of both world’s and present the readers with something unique, something unheard of, yet something remarkable. But reading books alone is never enough. Applying their concepts and lessons is the most important thing. After all, managing money and finance is a craft, not an art or a science. In sciences, reading a book and understanding its theories are merely enough. But in a craft, the only way to get better is to practice in the real world. Use the books and their knowledge as a stepping stone into the world of the Rich; use it as an anchor to ground your base in finance, but never depend on it entirely. Do this and surely, you’ll be on your way to being financially smart.

When you think about learning how to earn money like the world’s most famous billionaire’s and dream endlessly of becoming rich, what’s the first thing that you do? You learn. You try your best to find out how to make money, how to invest and manage finances to become financially independent and successful.

In the Internet Age that we find ourselves in today, information is at our fingertips. But perhaps, the information that we have is so vast and complex that it becomes difficult to handle or process. When it comes to learning about things like money and investing, there are a lot of websites, videos and even self-proclaimed money gurus out there who will tell you how to do this analysis and that analysis, and how to triple your money in 60 days and so on and so forth. And when things don’t go as planned, we simply give up on learning about money and think that it is too impossible for us to learn all these new terms and strategies. However, many people, including myself, would resort to handling this data overload from internet resources by reading a good old-fashioned book about money management. One such book, in fact, the first ever book on money management that I read, was Robert Kiyosaki’s ‘Rich Dad, Poor Dad’. The book, which I read as a 12 year old on my uncle’s couch in India during the summer, opened a new avenue and path of thinking and looking at the world and the money around us. The book is filled with many insightful lesson, accompanied by intriguing stories and analogies, and some of these I will share in this overview.

Summary:

Rich Dad Poor Dad by Robert Kiyosaki and Sharon Lechter, emphasizes the value of developing financial literacy from a young age. The author discusses how a person can enhance their wealth by making wise financial decisions and investing in assets throughout the entire book. Robert Kiyosaki’s early years are glimpsed in Rich Dad Poor Dad when he begins to learn about money at the age of nine. The phrase “poor dad” and “rich dad” are references to Kiyosaki’s actual father and a friend of his, respectively.

His friend’s father was an entrepreneur who dropped out of school young and became one of the wealthiest people in Hawaii, but his own father was a professor who made a good living but constantly suffered financially.

Kiyosaki frequently made an effort to comprehend both his rich dad’s and poor dad’s points of view, but it was his rich dad’s counsel that enabled him to learn about finances and amass fortune. The fundamentals of cash flow, balance sheet, income statement, assets, and liabilities are introduced throughout the book in a straightforward, understandable way. One of the reasons the author gives for publishing this book is that he wishes everyone had received the same financial education as he did as a young child. The phrase “the number one and the only rule” is used to underline the significance of understanding the distinction between assets and liabilities and the importance of concentrating on investing in assets. There are ten chapters in Rich Dad Poor Dad, plus an epilogue.

Throughout the novel, Kiyosaki uses fancy cars, or driving expensive vehicles, as an expression of something wealthy people can or should do. He associates consumption with wealth, but never suggests that people spend money they don’t have. In fact, he insists on paying for his own luxuries not with income earned by employment but with passive income produced by investments.

10 lessons from Robert Kiyosaki’s “Rich Dad Poor Dad” that many readers, including myself, found helpful:

• The wealthy put more effort into creating assets that provide revenue than they do into working for a salary.
• Be mindful of your own affairs: To safeguard your financial future, invest in yourself and start your own company or investmnts.
• Financial education’s significance To make wise judgments and increase your wealth, educate yourself about finances and investment.
• Assets and liabilities differ in the following ways: Liabilities deplete your bank account while assets increase it. Think about obtaining assets.
• The importance of cash flow: To gradually accumulate money, concentrate on establishing a positive cash flow.
• Don’t be afraid to take calculated chances in order to increase your wealth, but make sure you do your homework beforehand.
• Avoid falling into debt traps by being cautious when taking on debt to cover commitments that don’t generate income but could eventually become burdensome.
• Fear can paralyze, yet action and overcoming your fears are necessary for success. Don’t allow fear hold you back.
• Accept failure as a chance to learn and grow: Successful people learn from failure and utilize it to their advantage.
• Keep your eye on your objectives and don’t let distractions or doubters stop you from succeeding.

These 10 simple lessons are really key in building a basic understanding and foundation of money management and serves as a way to mentally prepare one for adopting techniques, methods and most importantly, a lifestyle for building wealth.

We know all about the glory and success in the lives of Michael Jordan and Michael (Mike) Tyson. Whilst Jordan is regarded as one of the greatest basketball players of all time, Tyson is seen as one of the most formidable fighters of all time. Though their sporting careers had numerous glorious moments and unforgettable victories, their lives after retirement took entirely different routes.

Michael Jordan’s salary when playing 15 seasons for the Chicago Bulls totaled a whopping $100 Million. But this is nothing compared to the $400 Million made by Mike Tyson during his professional boxing career. By the time they both retired at the end of the early 2000s, Tyson was surely the richer star, particularly in terms of salary earned. What may shock you however, is that today, Michael Jordan is worth over $2.5 Billion, whereas Mike Tyson is worth only $15 million. Why did Jordan’s net worth grow by 2500%, whereas Tyson loose nearly 95% of his money? The answer is simple – money management practices.

Money management practices simply refer to the ways in which people handle money. Many of us have the problem of ‘too little money’ and often don’t know how to earn money to buy all the things that we want. With celebrities like Tyson and Jordan, the problem was of ‘too much money’ – they had so much money that they didn’t know what to do with it.

What did Tyson spend his money on?

He bought homes and vehicles he never used. Police would call him when members of his entourage were stopped for driving vehicles he had forgotten he had even purchased. He would take someone to a BMW or Mercedes dealer and buy every vehicle in the dealership just to display his wealth. He once picked up a jacket and discovered thousands of dollars in the pockets that he had previously forgotten about. His mansions had been used by strangers who enjoyed the luxuries he had bought. Numerous gifts, including exotic animals, expensive jewels, limos and designer clothing, were purchased for friends. Even strangers would receive Rolex watches from him if they complimented him in public.

He wasn’t all wasteful though. He made several investments too. He purchased many assets, bought stakes in various companies and even invested in a water park. But what he didn’t invest in was good financial education. He simply couldn’t tell apart a good and a bad investment. The companies he bought stakes in went bankrupt and the water park he put millions into shut down. So, without understanding what he was getting into, he let other people manage his money and make investments for him, many of whom were not qualified, such as the convicted former boxing promoter Don King, who embezzled and looted millions from financially uneducated boxers and athletes like Tyson. And all of a sudden, Tyson was $34 Million in debt and on the streets.

So, what did Michael Jordan do differently?

For starters, Jordan recognized the importance of building a source of income that would last him beyond his basketball career. For many of us, this source of lifelong income may be from buying properties and purchasing assets that are likely to appreciate and grow in the long run. But for Jordan (and many sports stars around the world), a great way of ensuring a lifelong income is to ‘build a brand’. Building a brand simply refers to leveraging fame and popularity to promote products such as clothing and other accessories. This usually works because people want to associate themselves with success and fame, and an easy way to do this is to buy products of people who are already successful and famous. For instance, many youngsters may buy products from cosmetic brands like SKIMS and Kylie Beauty in order to associate themselves with the lifestyle of the affluent Kardashian-Jenners. Likewise, Jordan leveraged his popularity to build arguably the world’s biggest shoe brand – the AIR JORDANS. Till this day, people want to associate themselves with the legacy and popularity of Michael Jordan and his Air Jordan shoes. More than 25 years from his retirement, Michael Jordan is making hundreds of millions simply because of the deals he has made with Nike for the Air Jordan Brand.

On top of that, Jordan bought several sports teams that became highly profitable for him, such as the NBA’s Charlotte Hornets and the MLB’s Miami Marlins. So, how did Jordan forsee all of this? Well, as it turns out, Jordan made wise financial decisions, invested his money in sound, robust deals and understood the foundations of business and money management.

No one is saying you need to be a business expert or a finance guru. All you need is a strong foundational understanding of money management principles and techniques. Whether you have the problem of ‘too much money’ or the problem of ‘too little money’, understanding the basics of investing and finance are key in shaping your future and deciding whether we end up as a ‘Jordan’ or a ‘Tyson’.